Policy Documents

Long-Term Care Equity Protection Act

December 27, 2000

In this model legislation and summary, the bill asserts that its purpose is intended to be introduced in conjunction with the Long-Term Care Insurance Act. Its purpose is to require insurers offering long-term care policies to offer a nonforfeiture provision within the policy. A nonforfeiture provision offers to the consumer a specified value if the long-term care plan should lapse.

[The] bill stipulates that each insurer offering a long-term care insurance policy shall offer a nonforfeiture provision. The provision shall be appropriately captioned and shall provide that in the event of default in any premium payment, after premiums have been paid for at least two full years, the insurer shall grant upon proper request a reduced paid-up nonforfeiture benefit on a plan stipulated in the policy. Nonforfeiture values suggested in the model act include one or more of the following:

  • A reduced paid up plan;
  • An extended term;
  • A return of premium; and
  • Cash value.

Applicants who decline to have a nonforfeiture provision included in the policy shall sign a separate form

indicating their decision to decline the nonforfeiture provision.